Fed Doesn’t Relieve Anxiety, GDP Will Take Shot at Dollar and Equities

Talking Points:

• The Fed didn't change its policy tone at its recent rate decision and left its June hawkish bearing intact

• If the central bank still stands behind its 50bps of hikes in 2015 view, the next meet may have to be liftoff

• Today's 2Q GDP update will weigh heavily on Whether the Fed hikes in September or if it will again delay

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What relief may have been expected from the Fed's rate decision would never come. The broader market floating an increasingly-winded long-risk position was looking for a softer tone that would put to bed any fear of an ambitious central bank effort to tighten 2015. Die-hard Dollar bulls on the other hand - perhaps seen as agents of chaos for other assets - were looking for a definitive call on an impending hike that the group has clearly attempted to prepare the market for. The outcome could easily be called 'unchanged' which leaves the door wide open to either hike or delay. It also leaves the door wide open for the US GDP's influence on that call. Dollar and equity traders will remain on edge heading into the data. Meanwhile, event risk will fill out the Euro-area and Aussie docket and tempt volatility. Meanwhile, there are those areas of the market that are not forced to hold their breath - GBPCAD, AUDCAD, etc - and may appeal to those looking for consistency rather than data-derived explosions. We look at the active and steady in today's Trading Video.

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